Galaxy will pay $65 million for Argo’s Helios facility and provide a $35 million loan to assist the miner in its restructuring.
Argo Blockchain (ARBK) will avoid bankruptcy after agreeing to sell its Helios mining facility in Dickens Country, Texas, to Galaxy Digital (GLXY) for $65 million.
According to a statement sent to CoinDesk, the miner will also receive a new $35 million loan from Mike Novogratz’s crypto-focused financial services firm, which will be secured by Argo’s mining equipment.
“Over the last few months, we’ve been looking for a way to continue mining during the bear market, reduce our debt load, and maintain access to Texas’ unique power grid,” Argo CEO Peter Wall told CoinDesk. “This agreement with Galaxy accomplishes all of these goals, and it allows us to fight another day,” he added.
The transaction will assist Argo in strengthening its balance sheet and avoiding bankruptcy after a deal for $27 million in funding fell through in October. Earlier this month, the miner announced that it was in advanced talks to sell some of its assets and complete an equipment financing transaction in order to avoid Chapter 11 bankruptcy.
According to Chris Ferraro, president and chief investment officer at Galaxy, the deal was structured to strengthen Argo’s balance sheet and capital structure. When the miner began its process, “we were in a position to completely solve the problem for Argo while also accelerating the expansion of our own mining capabilities,” he added.
According to the statement, Argo will also enter into a two-year hosting agreement with Galaxy, securing a place for Argo’s computers to continue mining at the Helios facility.
Helios, Argo’s largest mining facility, has a power capacity of up to 180 megawatts (MW) and will become Galaxy’s flagship mining operation. The Argo facility began operations in May, with a goal of 800 megawatts (MW) of energy consumption and 20 exahash/second (EH/s) of computing power. If fully developed, Galaxy could become one of the largest bitcoin miners.
The crypto miner, whose shares are traded on the London Stock Exchange (ARB) and Nasdaq (ARBK), requested a 24-hour suspension of US trading on Tuesday. The London Stock Exchange was already closed due to a bank holiday in the United Kingdom.
Argo is one of several miners struggling to stay afloat as rising energy prices drive up costs while bitcoin prices remain stubbornly low. Core Scientific (CORZ), one of the largest miners by computing power, declared bankruptcy this month, while Compute North, another major player in the space, declared Chapter 11 bankruptcy in late September. Greenidge, a bitcoin miner, also announced a debt restructuring agreement with its lender NYDIG, though the company still faces bankruptcy.
Helios, Argo’s largest mining facility, has a power capacity of up to 180 megawatts (MW) and will become Galaxy’s flagship mining operation. The Argo facility began operations in May, with a goal of 800 megawatts (MW) of energy consumption and 20 exahash/second (EH/s) of computing power. If fully developed, Galaxy could become one of the largest bitcoin miners.
“Quality infrastructure and access to low-cost energy are the cornerstones of a successful mining operation,” said Amanda Fabiano, Galaxy’s Head of Mining, in a statement.
According to the statement, Argo will also enter into a two-year hosting agreement with Galaxy, securing a place for Argo’s computers to continue mining at the Helios facility.
The brutal crypto winter, exacerbated by the implosion of crypto exchange FTX, has not only caused pain for the industry, but has also created opportunities for some investors to acquire some crypto assets at significantly lower valuations.
